Now the company proposes to take what could be a cure for diabetes into people. ViaCyte has asked to begin a Phase 1/2 clinical trial, which would assess both safety and efficacy of its product. ViaCyte is targeting Type 1 diabetes, in which the insulin-producing cells are destroyed. Patients require multiple injections of insulin daily to survive.

CIRM Movie on Diabetes for Viacyte

The announcement is good news for California's stem cell agency, the California Institute for Regenerative Medicine. The agency has awarded nearly $39 million to ViaCyte to ready its device for human use.

Paul Laikind, ViaCyte’s chief executive, said if all goes smoothly, the first patients will be treated in August or September. Based on animal studies, it will take a few months to see results, and just a few patients will be treated at first.

CIRM itself, funded with $3 billion in state bond funds, has come under pressure to show results from its work. The money is projected to run out in 2017. Some supporters of the agency have proposed launching a new initiative to continue funding.

"This is a great example of how the investment that the voters made in creating CIRM is beginning to move from labs to patients," said Joe Panetta, a member of CIRM's governing board and chief executive of Biocom, the San Diego-based life science trade group. ""There are at least a dozen other clinical trials in progress. This is good for CIRM and San Diego."

"The project is one that has been front and center for us for six years," Thomas said. "As a principal funder of Viacyte since 2008, we are delighted that they have taken this major step towards getting a Type 1 Diabetes therapy to patients."

Robert N. Klein, former chairman of CIRM's board, who has a 24-year-old son with Type 1 diabetes, also praised the announcement.

"This is an exciting day for the father of any son or daughter who has Type 1 diabetes," Klein said. "This is a very critical trial that we're optimistic about. ViaCyte has a team that is extremely well-qualified to deal with complications and setbacks that often come up. They have extreme quality integration of their clinical and scientific groups, so they can respond well to modifications they may have to make along the way to accomplish all of their goals."

If the therapy succeeds, it will also provide a win for advocates of embryonic stem cell therapy. These stem cells were greatly touted as disease cures in the campaign to pass Prop. 71, which established CIRM, in 2004. However, very few therapies based on embryonic stem cells have reached clinical trials. By contrast, many trials are proceeding with non-embryonic stem cells, and some treatments, such as with blood-forming stem cells, have long been in clinical use.

Embryonic and other kinds of "pluripotent" stem cells also pose a risk of forming tumors. If, say, spinal cord tissue grown from pluripotent stem cells contained any unconverted cells, the pluripotent stem cells could proliferate when transplanted into a patient, forming a tumor. To prevent this from happening, remaining embryonic stem cells must be detected and removed from tissue to be transplanted. One of ViaCyte's grants, for $5.4 million, was meant to address that concern.